Michigan

Michigan Legislature appears close on energy plan

LANSING -- Lawmakers may be close to finishing up a state energy plan, but that's not stopping critics from going after details of a requirement in the bills to use more renewable energy.

Although making Michigan less reliant on traditional sources of electricity is seen as a laudable goal, the timeline and price tag of the new renewable requirements are causing disagreements.

Critics say the bipartisan plan being negotiated is "unforgivably expensive." They say they wonder why customers would be charged more up front before seeing extra green power.

SUMMARY OF THE PLANENERGY PLAN: State lawmakers and Gov. Jennifer Granholm want to pass comprehensive energy legislation this week after months of negotiations.

CRITICS: Are targeting requirements that more of Michigan's power come from wind and other renewable sources. They like the concept but not the details, saying customers would pay too much and green power wouldn't be developed quickly enough.

DEFENDERS: Say they will reasonably cap how much customers pay for green power by phasing in renewable requirements.

PRESSURE: In her weekly radio address, Granholm said it's urgent to pass an energy plan now to attract investment and jobs.

Residents may have to start paying up to $2 or $3 a month more as early as next year, but the state's share of renewable energy wouldn't have to increase until 2012. It wouldn't go up significantly until 2014.

"Other states don't do that," said Hans Detweiler, manager of state legislation and policy for the American Wind Energy Association. "What business doesn't want to get paid for a product in advance? But that's not how power markets operate in this country."

Backers of the legislation counter that a maximum $2 to $3 monthly surcharge for 20 years is reasonable -- the cost of a soda or beer according to DTE Energy Co. President Gerry Anderson.

Rep. Jeff Mayes, D-Bay City, said it's better to collect renewable fees up front so they're lower and spread over time. Business customers want to know exactly how green energy will affect their bottom line since it's more expensive than electricity produced by existing power plants, he said.

"We feel very good we have the public's interest in mind in terms of the cost caps in the bill," Mayes said. "Where else is life do you have cost cap containments?"

Opponents, though, say customers would pay less if costs were limited in a different way. They say they're confident renewable power is affordable when compared to the cost of building traditional power plants, given the skyrocketing price of coal and natural gas and the expense of nuclear plants.

"We don't want the wind industry to get a black eye for runaway costs that are not our fault," Detweiler said.

After months of talks, the Legislature hopes to pass the wide-ranging energy plan this week so Gov. Jennifer Granholm can sign it soon.

She has promoted Michigan's potential as a hub for renewable energy, both because it has more wind than other states and has a manufacturing base with thousands of companies capable of making parts for wind turbines and other renewable-energy equipment.

Michigan is one of four states with the potential for 30,000 new jobs in wind turbine manufacturing, according to the Granholm administration. She wants to create a market for green energy by requiring that 10 percent of Michigan's electricity come from renewable sources by the end of 2015. Renewable portfolio standards have been adopted in 26 states.

"What we need is an RPS; what we need is a commitment that Michigan will get a percentage of its energy from renewable sources," Granholm said while urging the Legislature to act in her weekly radio address. "And fortunately, it's not too late for us to bring those jobs to Michigan, but time is of the essence."

Less than 4 percent of the state's power is "green" today.

Some question how quickly Michigan's economy would benefit if utilities wouldn't have to start meeting significant requirements for a handful of years. They also complain utilities could collect fees with no guarantee that they'd generate more electricity from renewable resources.

Utility officials say customers would be refunded if their money doesn't go toward green power and add that it will take time to build or buy more renewable power. They note, for instance, that there's a backlog to get wind turbines.

"Everything in the industry takes five years or longer to invest and make a change," Anderson said.

Former Republican Senate Majority Leader Ken Sikkema, a supporter of the legislation, said "it's a matter of balancing the costs with how quickly you get there."

To insist on having turbines up and running by next summer would force customers to pay a premium, he said.

Detractors say they are suspicious, though, that Michigan's two dominant utilities have successfully lobbied for many provisions benefiting only themselves in the lengthy legislation that also would limit competition they face in the state's electric market.

"It is important for lawmakers to understand exactly what they are being asked to support when they vote on the electric package," said Barry Cargill, executive director of the Customer Choice Coalition, a group of alternative power companies and their customers including schools and grocery stores.

"Too little information on the cost of these bills is being made available to lawmakers," he said.